We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
More View more
Real Time News
  • Trump says meeting with Chair Powell included topics including interest rates, negative rates, USD strength and the impact the USD has on manufacturing and trade with China and EU $EUR $DXY $SPX
  • @CVecchioFX aaaaand right on cue: https://t.co/lqJAm1W5lS
  • Right on cue. https://t.co/ZjBcg7W6wB
  • This is the line that sticks in my craw: "will make those decisions based solely on careful, objective and non-political analysis." It sounds like the Fed is pushing back on further rate cuts for the sake of cushioning the economy from the US-China trade war pre-2020 election.
  • RT @realDonaldTrump: Just finished a very good & cordial meeting at the White House with Jay Powell of the Federal Reserve. Everything was…
  • Forex Update: As of 15:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.39% 🇪🇺EUR: 0.18% 🇨🇭CHF: 0.14% 🇨🇦CAD: 0.06% 🇳🇿NZD: -0.08% 🇦🇺AUD: -0.18% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/YMeo92xv6Z
  • POTUS calling Powell to the White House to make sure the Fed has his back with US-China trade relations on the brink of their next breakdown? $USDCNH $XAUUSD $ES_F https://t.co/mWa1rdGMRA
  • Can't help but feel this meeting was intended to re-orient everyone's bearings in the event that Phase 1 of the US-China trade deal falls apart in a more public manner. cc @RichDvorakFX
  • "Finally, Chair Powell said that he and his colleagues on the Federal Open Market Committee will set monetary policy, as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective and non-political analysis."
  • "Powell's comments were consistent with his remarks at his congressional hearings last week. He did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming information that bears on the outlook for the economy."
Forex: USDOLLAR Clears 10,000 Ahead Of FOMC- JPY Hit By Uncertainty

Forex: USDOLLAR Clears 10,000 Ahead Of FOMC- JPY Hit By Uncertainty

2012-11-14 18:20:00
David Song, Currency Strategist





Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index






Forex_USDOLLAR_Clears_10000_Ahead_Of_FOMC-_JPY_Hit_By_Uncertainty__body_ScreenShot044.png, Forex: USDOLLAR Clears 10,000 Ahead Of FOMC- JPY Hit By Uncertainty

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is 0.32 percent higher from the open after moving 121 percent of its average true range, and we will need to see the Fed soften its dovish tone for monetary policy to see the greenback track higher over the remainder of the week. Indeed, the technical outlook points to a short-term correction for the dollar as the 30-minute relative strength index falls back from overbought territory, but a shift in central bank rhetoric may spark fresh monthly highs in the index as market participants weigh the prospects for future policy. As the USDOLLAR continues to carve out a series of higher highs paired with higher lows, we will preserve our bullish forecast going into the end of November, and the FOMC Minutes may heighten the appeal of the reserve currency as the central bank highlights the ongoing improvements in the world’s largest economy.

Forex_USDOLLAR_Clears_10000_Ahead_Of_FOMC-_JPY_Hit_By_Uncertainty__body_ScreenShot045.png, Forex: USDOLLAR Clears 10,000 Ahead Of FOMC- JPY Hit By Uncertainty

As the FOMC keeps the door open to expand its balance sheet further, a dovish tone for monetary policy would drag on the dollar, and there’s growing speculation that the central bank will expand its open-ended asset purchase program beyond the $40B monthly limit as Operation Twist is scheduled to expire at the end of the year. However, as the ballooning balance sheet raises the long-term threat for inflation, and we may see a growing number of Fed officials argue against additional monetary easing as the economy gets on a more sustainable path. As the USDOLLAR finally breaks above the 10,000 figure, we would like to see a close to the upside to see the bullish sentiment get carried into the following week, but the index may face a short-term pullback as it comes up against trendline resistance. Indeed, we will be watching the relative strength index for confirmation as it preserves the upward trend from the end of September, but the oscillator may foreshadow a short-term correction in the index as it approaches overbought territory.

Forex_USDOLLAR_Clears_10000_Ahead_Of_FOMC-_JPY_Hit_By_Uncertainty__body_ScreenShot046.png, Forex: USDOLLAR Clears 10,000 Ahead Of FOMC- JPY Hit By Uncertainty

The greenback rallied against three of the four components, led by a 0.96 percent decline in the Japanese Yen, and the low-yielding currency may weaken further over the near-term as policy makers put increased pressures on the Bank of Japan (BoJ) to address the risks surrounding the world’s second-largest economy. Indeed, the risk for a political shift in Japan has dampened the appeal of the Yen as a growing number of Japanese officials put pressure on the BoJ to embark on an unlimited asset purchasing program, and we should see the central bank continue to embark on its easing cycle in 2013 as it fails to achieve the 1 percent target for inflation. However, as positive real interest rates props up the appeal of the low-yielding currency, the recent weakness in the Yen could be short-lived, and currency traders may favor holding the low-yielding currency going into the following year as the major central banks across the global keep interest rates at or close to record-lows.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

New to FX? Watch this Video

Join us to discuss the outlook for the major currencies on the DailyFXForums

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.


News & Analysis at your fingertips.